For whatever reason, there has been an onslaught of articles recently about the in-flight product and the potential to make it better (or cheaper). I thought it would be interesting to take a look at what’s going on in the business.
So is the airplane experience actually improving? The answer, as is so often the case with these companies, is “it depends.” And whether the cause is simply technological innovation or the airlines’ generosity depends not only on the airline but also on your class of service.
Business class has always been where the airlines make their money. Although the cost of providing the product is not that much more than it is in the back of the plane, the ticket is often 5X the price of an economy ticket. Over the past several years, US carriers have been turning three-class planes (First, Business and Coach) into two-class planes (Business and Coach). Traditionally, corporations were willing to pay for business class but not first, which was usually filled with upgrades. Thus, instead of having a class that nobody paid for, the airlines eliminated it and simply expanded their business classes.
Business class used to be about creature comforts, but it is competing more than ever on product. Now, travelers paying to sit up front expect more than a cushy seat; they expect luxury. Take a look at some of the “improvements” that Business Insider wrote about. We’re no longer talking about an extra piece of cake. Now, you have a world-class chef designing your meal. It may not taste much better, considering how hard it is to cook food on an airplane, but it comes with a pedigree. F&B seems to be an area ripe for improvement. Of the ten examples that BI mentions, four of them are related to eating or drinking. You can also get a concierge, a ride to/from the airport and luxury bedding. Or, if you’re flying Etihad, you can have a multi-room apartment.
The value proposition is simple: Traveling at the front of the plane should be like staying in a four-star hotel with wings.
Where business class is about luxury, economy is about something just beyond survival. Business Insider notes a number of enhancements that range from mundane (Thanks for the extra light bulbs in the ceiling.) to truly creative, as Air New Zealand’s Sky Couch shows:
But despite an extra inch or two of legroom (thanks to slimmer seats), enhanced in-flight entertainment (Anyone who tells you that airlines show lousy movies has never seen “Midnight in Paris.”) and a few perks such as better meals and amenity kits, most of the improvements have come from technological innovation, as opposed to the benevolence of the carrier. Why is that? Because the folks in the back of the plane simply aren’t very profitable. Airlines will invest in the product as long as it doesn’t cost them much. Differentiation has only minimal benefits to their bottom lines.
Which brings us to the most interesting article I read today, Scott McCartney’s weekly The Middle Seat column in the Wall Street Journal. This weeks piece was his suggestions for what the airlines could do with their recent profits. Note that this article may be behind a paywall, but his recommendations were the usual ones that you hear: improved legroom, eliminating/lowering fees, etc.
I wish him luck, because it isn’t happening. Airlines are historically among the least profitable businesses in the world, and this recent run of extra cash will only offset billions of dollars of debt and decades of losses. Besides, guess how they got these extra profits? Combined with lower fuel prices, they added seats by cutting legroom, increased fees, etc. They’re not going to give it back now. Virtually every major airline is publicly traded and owned by investors, and these investors kind of like the way things are now.
The Bottom Line
Enjoy your improved amenities. Just don’t expect to get them for free. And that’s okay. If airlines aren’t making money, they are going to cut back. Let’s just hope they don’t add pay toilets.Want to subscribe? Just enter your email in the box above (and to the right) and click on the confirmation. GMailers, check your Social or Promotions boxes!
Follow me on Twitter @FFMiles101 or share with the Facebook button below.
And finally, you can apply for credit cards through the Credit Cards for Charity link above. All card proceeds are donated to charity, so please do well by doing good!